The Household Spending Intentions (HSI) series for November showed solid improvement for both Home Buying and Retail spending intentions. Lower interest rates following the November RBA monetary policy easing and the reopening of large parts of the economy supported spending intentions in the month. Both Entertainment and Motor vehicle spending intentions were a little higher in November. Travel spending intentions were flat on the month, while in contrast, Health & fitness and Education spending intentions both declined in November. The good news is that the recently released Q3 20 national accounts showed that the Australian economic recovery is well underway. Perhaps more importantly, we expect a further rise in GDP in Q4 20, meaning that the economic contraction for 2020 is expected to be ‘just’ –2.8%. This will mean that Australia will likely have one of the shallowest recessions of all major economies in 2020.
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